Back to all Blog 04 February 2025

Interest rates forecast to fall at fastest rate since UK’s financial crisis

Economists predict rates could drop by one percentage point within six months, offering mortgage holders relief but increasing global uncertainty according to the Times newspaper. The Bank of England is expected to cut interest rates from 4.5 per cent to 4.25 per cent next week in the first of what is likely to be a series of back-to-back rate cuts, which could result in them falling by as much as one percentage point over the next six months. The rate cuts are set to bring the cost of borrowing down to below three per cent for the first time since October 2022.

Barclays said that they expected rates to fall to 3.5 per cent by September, while Morgan Stanley predicted policymakers would eventually reduce rates to as low as 2.75 per cent during the first half of 2026. Banks have already slashed fixed mortgage rates below 4 per cent on the back of lower interest rate expectations. Barclays, HSBC and NatWest have all cut mortgage rates this week by up to 0.25 percentage points, joining the other big six lenders in Halifax, Nationwide and Santander in offering fixed rates below 4%. The lowest two-year fixed rate has fallen from 4.22 per cent at the start of December to 3.79 per cent, which would cut monthly repayments on a £200,000 25-year mortgage from £1,080 to £1,033 — a reduction of £564 a year. Some 1.68 million homeowners have fixed deals due to end this year, according to the City regulator, the Financial Conduct Authority, while homebuyers have had to pay higher rates of stamp duty since April 1. However, the good news for homeowners comes against the backdrop of growing global economic uncertainty caused by President Trump’s trade war, which is expected to harm growth.

 

Property News and Blog

Read about our latest property news and get our regular property market updates from the team at Ian Green Residential, including specialist market news for Little Venice, Regent’s Park and St John’s Wood.

‘Promising signs’ for Prime London’s property market as under offers jump by 22% - Ian Green Residential
‘Promising signs’ for Prime London’s property market as under offers jump by 22%
‘Socially distanced’ viewings & digital deals: How the property market could function post-lockdown - Ian Green Residential
‘Socially distanced’ viewings & digital deals: How the property market could function post-lockdown
‘Unexpected mini-boom’ pushes asking prices to a record high - Ian Green Residential
‘Unexpected mini-boom’ pushes asking prices to a record high
View All

Useful Links

How much is my property worth?

Accurate, impartial house valuation gives you the means to make better property decisions.

get a valuation
Let’s start a conversation

At Ian Green Residential, we are here to assist you with all your property needs. Whether you have a general enquiry, or require a private consultation, our team is ready to help. Contact us today, and let us provide you with the support and information you need!

T: 020 7586 1000